China’s free-trade zones fail to shine despite Beijing’s desire to lure global investors
- The new free trade pilot zones have been unable to match the success of Shenzhen in the 1980s and the Pudong area of Shanghai in the 1990s
- Government eyes improved policies in Shanghai and Shenzhen as China seeks to integrate further into the global economy
Dalian’s determination to woo foreign investors to the port city in northern China is spelt out clearly by a sign saying “you can only say yes and you are not allowed to say no” that hangs in a local governments business service centre.
Staff are encouraged to process business registration applications to help the local government’s efforts to translate its status as a free trade pilot zone, which was granted by Beijing in March 2017, into a pro-business and investor-friendly international port that can play a central role in the regional economy.
“Whatever the other [free trade] zones are offering, we can do it better here for sure,” said Zhang Hongguang, a deputy with the Dalian free-trade zone management committee.
But the results have not been encouraging as foreign direct investment in Dalian plunged 17.6 per cent in 2018, according to official data.
Whatever the other [free trade] zones are offering, we can do it better here for sure
Zhang, though, insists the free trade pilot zone is not only about granting market access for foreign investors, but also testing the limits of what China can do to help businesses.
“Our goal is to be the leader in the Northeastern region in reforms,” she added.
The Dalian free trade area is one of three areas designated in Liaoning to test free trade practices, with the province one of the 12 regions containing such zones after the programme started in Shanghai in 2013.
But as Dalian’s experience shows, the success of China’s free-trade zone in attracting foreign business has been less than hoped.